According to CoreLogic NZ’s January Housing Chart Pack, Wellington and Auckland have experienced the most substantial declines among main centres, with values dropping approximately 25 per cent and 22 per cent, while Christchurch showed more resilience with only a 7 per cent decrease.
CoreLogic NZ Chief Property Economist Kelvin Davidson said the market remains subdued due to various challenging factors.
“In December, the national figure edged down by another 0.2 per cent,” Mr Davidson said.
“That was the ninth fall in the past 10 months, with those drops initially reflecting high mortgage rates, but more recently the weakness of the labour market.”
The total listings on the market have surged 25 per cent above the five-year average, particularly in major centres like Auckland and Wellington, giving buyers increased negotiating power.
New Zealand’s residential real estate market currently stands at a combined value of $1.62 trillion, with property values across the country showing a 3.9 per cent decline over 2024, reaching a 17-month low.
The rental market has also experienced a slowdown, with growth rates dropping to levels not seen since 2022.
However, gross rental yields have reached 3.9 per cent, the highest level since early 2016.
The lending landscape is shifting, with borrowers increasingly favouring shorter-term loans.
Approximately 66 per cent of New Zealand’s existing mortgages by value are fixed but due for repricing within the next 12 months.
Looking ahead, Mr Davidson said there will be both opportunities and challenges in the market.
“Lower mortgage rates will obviously be a boost for sales volumes and property values. But there are also debt-to-income (DTI) ratio caps lurking on the horizon,” he said.
“DTIs aren’t binding yet, but they could become a much bigger consideration for some borrowers in the first half of the year.
“It’s not great news for homeowners especially those that purchased around peak levels, but ultimately the downturn conditions are most favourable for recent buyers.”
